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First Steps Towards Carbon Neutral Growth

The aviation industry is going green and airlines are required to measure their own carbon footprint and cut emissions. The industry is taking responsibility by formulating and committing significant emission reduction initiatives based on concrete targets. Internationally, the aviation industry has made a voluntary commitment and is striving towards carbon neutral growth by 2020 – meaning that carbon emissions remain steady even as global air travel increases. So far, the only mandatory limits on GHG emissions from aviation were enacted by Europe, Australia, and New Zealand.

European Union Emissions Trading Scheme (EU ETS)

In addition to rising oil prices and increased pressure from global biofuel mandates, the aviation Industry faces new costs through a heightened increase in regulations pertaining to CO2 emissions. Starting in 2012, international air-traffic aviation will be included in the EU Emissions Trading System (ETS).
The Scheme applies to all flights to and from the EU member countries. That means airlines’ operations and growths perspectives will be directly dependant on the fuel they consume and the related amount of CO2 they produce. Any excess volume of CO2 has to be traded against carbon credits based on the specific emission targets.

In order to mitigate the climate impacts of aviation, the EU has decided to impose a cap on CO2 emissions from all international flights independent of provenance. Accordingly, emissions from all domestic and international flights – from or to anywhere in the world – that arrive at or depart from any EU airport will be covered by the new carbon regulations. Thus, from 1 January 2012, around 4.000 operators will face emission limits for any flights into and out of the 30 nations covered by the cap-and-trade scheme. As a consequence, aircraft touching down or taking off in the EU have to cut carbon dioxide emissions by 3% under 2004-2006 levels in 2012, and by 5% from 2013. All airlines will face a total cap of 212,9 million tons of CO2 in 2012, falling to 208,5 million per year between 2013 and 2020.

Under the EU ETS, aircraft operators that fly into or out of EU airports will be required to participate in the ETS, and surrender emissions allowances equivalent to the GHG emissions associated with their flights into and out of EU airports, regardless of whether the emissions occurred inside or outside of EU airspace.
Assuming the Aviation Amendments survive legal challenges and direct opposition from countries like the U.S., China, and India, it is estimated that carriers will have to spend around $15 billion between now and 2020 to comply with ETS quotas.